Being a Landlord doesn’t have to be complicated

Whilst there are over 100 laws and legislations you need to be aware of (which can seem daunting!) complying with landlord legislation is easy - when you have the right advice.

In this complete guide to landlord legislations and obligations, we will cover everything you need to know when letting a property in 2023. Including:

It’s not difficult to comply with landlord legislation, but failing to do so can be extremely costly. The easiest way to deal with landlord legislation is to use the property management services of your local letting agent and let them take care of everything for you!

Renters Reform

The long-awaited Renters Reform bill was presented to Parliament in May 2023 and is one step closer to becoming law.

Designed to help with the government’s commitment to “bring in a better deal for renters”, the bill will:

  • Abolish section 21 ‘no fault’ evictions and move to a tenancy structure where all assured tenancies are periodic.
  • Introduce more comprehensive possession grounds for landlords.
  • Allow tenants to appeal excessively above-market rents, designed to force them out of a current tenancy. Known as ‘backdoor’ evictions.
  • Introduce a new Private Rented Sector Ombudsman.
  • Create a Private Rented Sector Portal to act as a hub of legal obligations and compliance for landlords.
  • Give tenants the right to own pets in a rented property.

For a detailed update on the Renters Reform Bill, click here.

Consent to Let

If you currently have a residential mortgage on the property you want to let, you need to get consent to let from your mortgage lender. Consent to let is a formal, written agreement between you and your mortgage lender and gives you permission to let out your home for a short time. It’s likely that your mortgage lender will want to port your current residential mortgage to a new buy-to-let mortgage.

You will also need to advise your home insurance company that you will soon be letting the property. Again, it’s likely they will move you to new type of cover, one designed especially for landlords. If you don’t tell your insurance company prior to placing a tenant in the property and do need to make a claim, your insurer can refuse to pay out.

If you’re letting a leasehold property, check your agreement with the building’s management company to see if you are required to notify them of your intentions to sublet the property. Failing to notify them could be a breach of your lease agreement and you risk receiving an injunction preventing you from continuing with the breach, which in this case is letting the property. Continued breach of the agreement can result in you having to forfeit the lease completley.

Selective Licencing - Landlord Licence

The Housing Act 2004 gives local authorities across the UK the power to introduce selective licensing of privately rented homes. These are known as a ‘landlord licence’, and, in England and Wales, are only required for properties which is let as a House of Multiple Occupancy (HMO) and has five or more occupiers, from two or more households. In Scotland and Northern Ireland, every HMO is required to have a licence.

Although landlord licences are currently only required for HMOs, individual councils do have the power to introduce additional licencing schemes to all types of rental properties.

Selective licencing, or the landlord licence, was introduced to help local authorities maintain a balance on private rental stock levels. It allows them to keep track of the rental properties in their area and importantly, ensure they meet health and safety standards.

There have been several highly reported legal cases against landlords who haven’t complied with licencing requirements. In most cases, heavy fines were handed out to landlords, particularly HMO landlords.

Landlord licence requirements can vary from county to county. Some areas the landlord licence is strictly enforced, but in other areas you can find places where you don’t need one at all – even on a HMO!

Speak to your letting agent, or your local authority’s housing department, to find out if there are any selective licencing schemes in your area.

The Domestic Minimum Energy Efficiency Standard (MEES) Regulations

The Domestic Minimum Energy Efficiency Standard (MEES) Regulations first came into effect across England and Wales in April 2018. Initially only applicable to new and renewed tenancies, the MEES legislation was extended in April 2020 to apply to existing tenancies too.

This legislation requires all private rented properties to have an Energy Performance Rating (EPC) of E or above.

To legally let a property, Landlords in England and Wales must have an EPC survey carried out to ensure the property holds a rating of E or above. Landlords must provide the tenant with a copy of this EPC, before the start of the tenancy.

The MEES legislation was introduced to help improve the overall energy efficiency of private rented properties. Not only is this great for the environment and the UKs green target, it provides tenants with a better quality of home and makes things like heating costs more affordable.

Landlords who don’t comply with the MEES regulation can expect to receive a fine of up to £5,000 per property.

Parliament are currently reviewing the Minimum Energy Performance of Buildings (No.2) Bill, which outlines the need for the minimum energy efficiency rating of private rented properties to rise from an E to a C. It’s widely believed that this new bill will come into force and the minimum EPC rating will raise by 2030.

Right to Rent Checks

In England, landlords have a legal responsibility to check that any potential tenant over the age of 18 can legally rent a residential property.

Non-UK nationals, in accordance with immigration laws, must provide documentation to prove they have the legal right to be in the country. You must see the original documents in the presence of the tenant.

For British and Irish passport holders, you can use any certified identification document validation technology (IDVT) service to carry out the checks digitally. If you use a letting agent, they will carry out these checks on your behalf.

Failing to make the right to rent checks can result in a £1,000 for first offences and £3,000 for all subsequent offences. If you fail to check 4 tenants in one property, that counts as four offences.

Tenant Fee Act (2019) – The Tenant Fee Ban

The Tenants Fee Act (2019) prevents landlords from charging certain fees to tenants. Now, when singing a new tenancy, tenants only need to pay a refundable holding deposit, rent and any security deposit (which is capped).

Additional fees including Council Tax, utilities and TV licence costs are payable by the tenant, unless previously agreed with the landlord. Tenants are also responsible for covering the cost of any lost keys and late rent payments.

Landlords or agents who breach the act could be fined up to £5,000 for the first offence. If a landlord or agent is found to breach the act within 5 years of the first breach, they risk an unlimited fine.

Tenancy Deposit Protection Scheme

Landlords must protect tenant deposits in a government-approved tenancy deposit protection scheme.

There are three schemes for landlords to chose from, all of which keep the deposit safe during the tenancy. If you are letting your property via an agent, they will probably protect the deposit for you.

As well as keeping the deposit safe, tenancy deposit protection schemes will also arbitrate any disputes at the end of a tenancy and if damage has been caused to the property, they will determine what is a reasonable deduction, if any.

Once the deposit is protected, you must provide the tenant with ‘prescribed information’. Prescribed information consists of two things;

  1. You must tell the tenant which scheme their deposit is protected by and provide them with an information leaflet about that scheme.
  2. You must provide information about the tenancy, including contact details of all parties and circumstances which may affect a tenants deposit being returned.

Tenants who are not provided this information can sue their landlord for up to 3 times the deposit amount. Failure to provide this information will also mean landlords are unable to serve a valid section 21 notice.

Tenant Deposit Cap

Included within the Tenants Fee Act (2019) is a cap on tenant security deposits, detailed below:

  • For properties with a total rent up to £50,000 per annum, no more than 5 weeks’ rent can be taken as a deposit.
  • For properties with a total rent over £50,000 per annum, no more than six weeks’ rent can be taken as a deposit.
  • Holding deposits must be no more than one weeks rent.

These caps are only for new tenancies and do not apply to any tenancy which has been ongoing since 1 June 2019 or before.

How to Rent Checklist

Tenants must now be supplied with a copy of the Government’s ‘How to Rent’ Guide at the beginning and at renewal of any tenancy.

The guide currently covers:

  • What to look out for before renting
  • Living in a rented home
  • End of tenancy process
  • What to do if something goes wrong

Always send your tenant the guide directly from Gov.uk as it is regularly updated.

Safe to Let

Arguably, ensuring your property is safe to let should be your main priority as a landlord. Safety of tenants is taken very seriously and as the landlord, it’s your responsibility to ensure your property is, and stays, free and safe from hazards.

The government provide tenants with a simple ‘How to rent a safe home’ guide, which details what tenants should expect from their landlord. It’s a great idea to have a read over this guide and ensure you’ve got everything mentioned covered.

If there is any concern on the safety or condition of a rental property, your local council can conduct a Housing Health and Safety Rating System (HHSRS) check on any property. This rating system looks at 29 separate hazards, covering everything from gas safety and mould to trip hazards. Landlords must ensure they have taken all reasonable steps to protect their tenants from these hazards or they could face a hefty fine. To read the HHSRS landlord guideline and make sure your property is compliant, click here.

It’s widely expected that as the Government’s new rental reform, ‘A Fairer Private Rented Sector’, is rolled out, we will see revised, more stringent HHSRS requirements.

The Gas Safety (Installation and use) Regulations 1998

The Gas Safety (Installation and use) Regulations 1998 requires landlords to keep all gas appliances, pipes and flues in a safe condition. To ensure this, landlords must instruct a registered gas safe engineer to perform a gas safety inspection every year. Once the inspection is completed, and any works required are completed, a gas safety certificate will be issued. Landlords must provide tenants with a copy of the gas safety certificate and keep the original safe for two years, or until the end of the tenancy – whichever is longer.

Smoke and Carbon Monoxide Regulations

Required under the Smoke and Carbon Monoxide Alarm (England) Regulations 2015, landlords must make sure that their rental property has a working smoke alarm on every floor. They must also ensure there is a carbon monoxide alarm in any rooms that have a solid fuel appliance, like a gas boiler or coal fire.

Every 5 years, landlords must get a qualified electrician, or approved contractor, to conduct an electrical safety inspection on their rental property. If any works or additional investigation is required, it must be completed within 28 days of the first assessment. Once the electrician is satisfied the property complies with ESS, they will provide the landlord, or managing agent, with an Electrical Installation Condition Report (EICR). A copy of the EICR must also be given to the tenant.

Smoke and Carbon Monoxide HMO Regulations

A House of Multiple Occupation (HMO) must include a smoke alarm on each storey of the property which also has any living accommodation. There must also be a smoke alarm fitted in each individual unit within the property. Hugh-rick rooms, like the kitchen, must also have a heat alarm fitted.

Also alarms must be connected to the mains and all other alarms throughout the property. If the property is 3 floors or more, an alarm system with a central panel must be installed.

HMO landlords must ensure smoke and carbon monoxide alarms are in full working order at all times and maintained in line with manufacturer guidelines.

Electrical Safety Standards in the Private Rented Sector (England) Regulations

The Electrical Safety Standards in the Private Rented Sector (England) Regulations 2020 requires landlords to ensure the electrical system, and any electrical appliances, in a private rented property are safe.

All rental properties must have a full electrical safety inspection conducted by a qualified electrician every five years. Landlords must be able to provide a valid Electrical Installation Condition Report (EICR) before the start of any tenancy.

Electrical Installation Condition Report (EICR)

Once a property has passed the Electrical Safety Standards (ESS) inspection, an Electrical Installation Condition Report (EICR) will be issued. The EICR confirms a rental property is in a safe and habitable condition and is ESS compliant. Landlords must legally provide existing tenants with a copy of this report within 28 days.

Fire Safety Risk Assessment

As part of the Regulatory Reform (Fire Safety) Order 2005, landlords must carry out periodical fire risk assessments. Although, unlike gas and electrics, there is no requirement to provide a certificate.

The fire risk assessment can be carried out by landlords if competent, or by a fire safety specialist.

If a rental property is fully furnished, the landlord must ensure all furnishings are fire safe and have a manufacturers label showing ‘match’ and ‘cigarette’ tests.

HMO Fire Safety Risk Assessment

HMO properties require additional fire safety precautions being implemented. All HMO properties must have clear access to an escape route with emergency lighting. Lighting must be strong enough to resist fire, smoke and fumes for enough time for tenants to evacuate the property.

A fire extinguisher must be provided on every floor and all doors must be fire doors.

Legionella Risk Assessment

Under the Control of Substances Hazardous to Health 2002 (COSHH), landlords must carry out a legionella risk assessment.

Whilst the risk is low for occupied properties, this is a required under both COSHH and the Home (Fit For Human Habitation) Act 2018.

Home (Fit For Human Habitation) Act 2018

The Home (Fit For Human Habitation) Act 2018, is an amendment to the Landlord and Tenant Act 1985 and requires landlords to ensure rented properties are fit to live in before and during a tenancy.

This act covers:

  • The property must not be neglected or in a bad condition.
  • The property must be stable.
  • The property must not have any damp issues.
  • The property must have safe layout.
  • The property must have working drainage and sanitary facilities.
  • The property must have utilities for preparing and cooking of food.
  • There must be ample natural light to the property (particularly basement flats).
  • There must be ample ventilation for the property.
  • There must be a supply of hot and cold water.

As well as these points, properties must not have any of the 29 potential hazards listed in the Housing Health and Safety (England) Rating System (HHSRS).

A property can only be deemed unsafe for human habitation y a court of law.

Increasing Rent during a Fixed Term Tenancy

There are certain processes which much be followed if you would like to increase the monthly rent of a property during a tenancy.

If your property is occupied by a tenant under a fixed-term tenancy agreement, you will need to check the tenancy agreement for a clause which permits you to make a rent increase. This clause is not always included in tenancy agreements and without one, landlords cannot increase the rent until the fixed-term has ended.

Once the fixed-term tenancy has ended, landlords can either agree an increased rate prior to agreeing a new fixed-term tenancy, or allow the tenancy to become ‘periodic’, which is a rolling tenancy with no fixed end date.

If the tenancy is a periodic tenancy, landlords can increase the monthly rent annually.

Rents can only be increased to the maximum level set by the Valuation Office Agency (VOA), which can be found in the register of fair rents. If you believe this register is inaccurate, you can request the VOA to review the value once every two years.

If an increased rent is agreed with a tenant during a periodic tenancy, landlords must then issue a Section 13 notice (Form 4) giving the tenant at least one month’s notice of the increase.

Tenants can query a rent increase if they feel it is excessive. Tenants must raise their concern with the First Tier Tribunal before the Section 13 notice of increase comes into effect.

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